US cattle herd at lowest number since 1951

Wednesday

The lingering effects of drought across Kansas and the Midwest in recent years have led to another decrease in the U.S. cattle herd - which is at its lowest in more than 60 years.

Meanwhile, that will mean steady, if not higher, prices at the grocery store as the nation continues to try to rebuild.

The National Agricultural Statistics Service reported that the U.S. inventory of cattle and calves totaled 87.7 million animals as of Jan. 1. That was down by about 1.6 million cattle, or 2 percent, compared with this time last year.

This is the lowest January inventory since 1951, according to NASS.

Cattle numbers are also down in Kansas. The state's cattle and calves on Jan. 1 totaled 5.80 million head, down 1 percent from a year ago, according to the Kansas Agricultural Statistics Service. Steers weighing 500 pounds are down by 10 percent, at 1.77 million.

Also telling is the number of animals available to help rebuild the nation's cattle market. The number of cows and heifers is at 38.5 million - down one percent since last year and the lowest inventory since 1941.

"We've liquidated 16 of the past 18 years on the beef cow side," Kevin Good, a senior analyst with Colorado-based Cattle-Fax, said last month. "A lot of it has been because of increased input costs, higher feed, the drought, land being utilized for crops versus cattle. Now we are at a point that supplies are tight enough."

Drought, after all, has persisted since summer 2010. As conditions wore on, Kansas ranchers did the only thing they could as they watched their pastures bake, their feed costs skyrocket and their ponds dry up: They culled their cattle.

Kansas sale barns saw the onslaught while the state's feedlots suffered from the low inventory.

Hays Feeders announced in late 2012 that it would temporarily close its northwest Kansas feedlot after the multiyear drought, which has brought herd liquidation and high grain prices. A year ago this February, Cargill Meat Solutions' Plainview, Texas, plant closed. It could be a few years before it reopens.

The recent NASS report doesn't show encouraging signs for the state's feedlot industry. All cattle on feed for slaughter in feed yards totaled 2.13 million head Jan. 1, down 5 percent from the previous year.

The state remains in a drought - which is worse in the western half of Kansas, where conditions are severe to extreme, according to the U.S. Drought Monitor's weekly report released Thursday.

Still, the industry is trying to rebuild now that snow and August rains have helped pastures and replenished ponds. Beef cows, which had hit a more than 20-year low in 2013, now total 1.41 million head - a 6 percent increase. Also, 500-pound heifers, which were down 8 percent last year, are up 2 percent this year.

Meanwhile, calves less than 500 pounds, which in January 2013 had hit a low not seen since 1938, are up 2 percent this year at 650,000 head. The 2013 calf crop totaled 1.28 million head, up 2 percent from 2012.

Nationally, there is a 2 percent increase in young, female cattle retained for breeding. One expert says that factor could allow the herd's seven-year contraction to stabilize.

Rebuilding a herd at such diminished numbers won't happen overnight, Good added. The earliest the industry could have more meat in the market is 2016.

U.S. beef and cattle prices hit record highs in January, according to Kansas State University.

Glynn Tonsor, a livestock marketing specialist with Kansas State University, said that as of Thursday, the Livestock Marketing Information Center is projecting feeder cattle prices to average $169 to $$180 a hundredweight through 2015. Similarly, the agency projects fed cattle prices at $137 to $145 a hundredweight through the next two years.

That means the prices in the grocery store won't go down anytime soon.

"It is not unrealistic to expect all fresh beef prices to remain above $5 a pound for the majority of the next two years, given the supply-demand fundamental of the industry," he said.

Yet, it seems, despite prices, people are still buying beef. Fourth-quarter beef demand is up 1.8 percent. Tonsor also noted that per-capita beef consumption had previously increased from 55 to 65 pounds, but added that is coming down as more people consume chicken and pork.

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